The Australian government’s 2024–25 Budget has allocated AU$39.9 million over five years to develop policies and build capabilities that promote the safe and responsible adoption of artificial intelligence (AI). While this investment marks a significant step, some AI experts and industry leaders express concerns that it may fall short of harnessing the full potential of AI, a technology touted to deliver transformative changes.
Some critics suggest that Australia risks lagging in the global AI race. However, a closer examination reveals substantial investments in AI-related digital infrastructure both within the country and in the broader region, despite the challenges of a fiscally constrained environment.
AI holds considerable promise for the Australian economy, with potential benefits projected to range between AU$115 billion for generative AI alone and AU$280 billion for AI in general by 2030. A widely referenced 2019 McKinsey report estimated the economic benefits of AI and automation in Australia could fall between AU$170 billion and AU$600 billion by 2030.
Several initiatives outlined in the 2024–25 Federal Budget aim to support the safe and responsible deployment of AI, backed by the AU$39.9 million investment. Approximately half of this funding is earmarked for reshaping the National AI Centre and establishing an AI advisory body. Additionally, the Digital Transformation Agency will utilize existing resources to develop and implement AI policies within the government.
Over the next two years, AU$15.7 million has been designated to support the coordination of AI policy development, which includes regulatory enhancements and engagement activities. These efforts will focus on reviewing and strengthening regulations in areas such as healthcare, consumer protection, and copyright law. Furthermore, an additional AU$2.6 million over three years will be allocated to address and mitigate national security risks associated with AI.
This budget allocation reflects Australian public sentiment, which increasingly views AI with caution. Australians are notably more skeptical about AI’s future compared to other nations, with 64 percent expressing nervousness about the technology. Moreover, 80 percent of Australians believe that managing AI risks should be a global priority. Concerns are particularly pronounced regarding AI-generated content, misinformation, and disinformation.
In Australia, public concern about misinformation surged to 75 percent in 2024, up from 64 percent in 2022. The Ipsos AI Monitor indicates that 52 percent of Australians expect AI to exacerbate online disinformation. A 2024 study by Adobe on the Future of Trust found that 78 percent of respondents from Australia and New Zealand anticipate that misinformation and deepfakes will negatively impact elections.
Currently, Australian electoral law offers limited protections against deepfakes, disinformation, and AI threats, prompting calls for a ban on AI-generated election materials. Additional concerns include the influence of AI algorithms on social media, foreign interference through platforms like TikTok, and the potential exploitation of Australian children and their data.
Australia has actively participated in multilateral initiatives and AI standards-setting processes, such as the Seoul Declaration, Bletchley Declaration, and Hiroshima AI Process Friends Group. In June 2024, the Data and Digital Ministers unveiled the National Framework for the Assurance of Artificial Intelligence in Government, a collaborative effort involving federal, state, and territory governments.
Public sentiment also underscores a disconnect between the popular understanding of AI and the underlying infrastructure required to support it. When considering AI-related infrastructure, cybersecurity initiatives, education, and broader digital initiatives, the actual scale of government investment in AI across Australia and the Pacific is significantly larger than it may initially appear.
In November 2023, Prime Minister Anthony Albanese announced Microsoft’s AU$5 billion investment in Australia. This announcement has fueled demands for sovereign AI development, including the creation of sovereign foundational models and the establishment of a Sovereign AI Accelerator Fund.
The budget also includes AU$288 million over four years for a digital ID scheme, which encompasses the development of a pilot government-backed digital wallet. Additionally, the government previously announced the establishment of ‘AI Adopt’ centers, supported by an initial AU$17 million commitment in the 2023–24 Federal Budget.
Notably absent from these budget announcements is direct investment in AI across the Indo-Pacific. This omission likely reflects Australia’s commitment to supporting regional priorities and developing the infrastructure necessary for AI. Australia is already collaborating closely with regional partners on various key initiatives, including digital transformation, emerging technologies, cybersecurity, and addressing the existential threat of climate change.
The government has made significant strides in working with Pacific states on data and communications infrastructure, as well as extensive engagement and investment in cybersecurity, all of which are crucial for AI adoption. Several aid projects aim to enhance regional connectivity, such as contributions to the AU$15 million Palau submarine cable and the nearly AU$80 million trans-Pacific subsea cable. Additionally, Australia will invest approximately AU$3 million in Pacific Island digital identity infrastructure.
The 2024–25 budget commitments emphasize the importance of ensuring the safe and responsible use of AI. Whether these measures sufficiently support an innovation-driven agenda remains uncertain. However, the private sector will continue to play a pivotal role in AI research and development, technology diffusion, and deployment.
Australia’s national strengths in AI remain somewhat ambiguous. The government should prioritize identifying Australia’s comparative advantage in this rapidly evolving field. Currently, the focus appears to be on building the necessary digital infrastructure in Australia and the Pacific to enable AI development and deployment. What follows will be crucial in shaping the country’s future in AI.
